International Accounting Standards AAT level 4

IAS 1 Presentation of Financial Statements

Emphasises the general objective that accounts should be useful to existing & potential investors, lenders & other creditors Financial statements must be produced annually A complete set of financial statements must include:Statement of Financial PositionStatement of Profit or Loss & other comprehensive incomeStatement of changes in equityStatement of Cash FlowsNotes including significant accounting policies & explanatory information Must show name of company, dates of accounts, currency, rounding

IAS 2 Inventories

Must be valued at the lower of cost or net realisable value Value inventories items separately FIFO and AVCO can be used to establish the value of closing inventory not LIFO

IAS 7 Statement of Cash Flows

Cash changes described as: Operating activities (normal business)Investing activities ( purchase of ppe, disposal of ppe, dividends received from other companiesFinance activities (dividends paid, share issues, bank loans)

IAS 10 Events after the reporting period

Events which happen between the year end and the date when the financial statements are authorised for issueIAS 10 distinguishes between adjusting and non adjusting eventsAdjusting eventsEvidence of conditions that existed at the year end if material changes should be made to the statementse.g. inventories nrv below costtrade receivables where customer goes insolventsettlement of court case if obligation at year endNon adjusting eventsIf material disclose as a note and give estimatee.g.purchase of assets, losses due to fire, flood, strikesGoing concern - if the directors decide after the year end to cease trading  the financial statements must be adjusted 

IAS 16 Property, Plant & Equipment (PPE)

PPE tangible items that are used in the production or supply of goods or services Will be used for more than 1 period Must be able to measure cost reliably and expect future cash inflows as a result Cost can include purchase price and any directly attributable costs e.g. site prep but not administration or training Can measure at cost or revaluation If you revalue you must revalue everything in that class of asset Revaluation gain classed as other comprehensive income, gains in revaluation reserve Depreciation included - the systematic allocation of the depreciable amount over the assets estimated useful life

IAS 18 Revenue

Revenue measured at the fair value of consideration received or receivable, when seller has transferred the risks and rewards of ownership of the goods (usually when despatched)Amount must be able to be measured reliably

IAS 17 LEASES

Must account for leases in accordance with commercial reality rather than legal form May be finance or operating Finance - lease transfers substantially all risk and rewards of ownership of the asset to the lessee5 situations which could lead to a finance lease lease transfers ownership option to purchase lease term is for major part of assets economic life present value of minimum lease payments amounts to assets fair value lease is so specialised only lessee can use it 2 methods actuarial and sum of digitsActuarial ( treat as loan with % interest)Sum of digits (interest calculated using 1 + 2 + 3 etc highest first to allocate interest

IAS 36 IMPAIRMENT OF ASSETS

If an assts carrying amount is greater than is recoverable amount it is impaired (worth less than stated in accounts) Impairment loss is difference between carrying amount and recoverable amount. Carrying amount is the amount stated in accounts (cost less depreciation) Recoverable amount is the HIGHER of its fair value less costs of selling or value in use Value in use is the present value of any future cash flows arising on disposal Recognise the loss immediately in the accounts

IAS 37 Provisions, Contingent Assets/Liabilities

Provision - recognised if the company has a present obligation as a result of a past event and it is PROBABLE that there will be an outflow as a result and that can be reliably estimated.Contingent liability - possible obligation from past events but will be confirm when future events occur or don't occur which is not wholly in the company's control, orA present obligation arising from past events but not recognised because it is not probable that there will be an outflow or it can't be measured reliablyDisclose as a noteContingent Asset disclose only if inflow is probable

IAS 38 INTANGIBLE ASSETS

Identifiable, non monetary asset with no physical substancee.g. goodwill, research and developmentResearch and developmentresearch write off as expensedevelopment , recognise as intangible asset once PIRATE criterial metProbable future economic inflowsIntention to complete and sellResources adequate to completeAbility to use or sell assetTechnical feasibilityExpenditure can be measured reliably